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The Dow Jones news today focuses on rising stock prices this morning after the Trump administration proposed a plan to sell roughly half of the U.S. Strategic Petroleum Reserve as part of its latest budget proposal. Trump's new budget proposal aims to balance the budget within a decade by cutting Medicaid payments, student loan payments, and agricultural subsidies.
Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:
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Now here's a closer look at today's most important market events and stocks, plus Tuesday's economic calendar.
The Five Top Stock Market Stories for Tuesday
- President Donald Trump has released his 2018 budget and it's generating a massive amount of headlines. The plan would slash $1.7 trillion in spending over the next decade and make big cuts to the EPA, State Department, and Department of Education. The budget plan also includes some worrisome cuts for retirees and poorer Americans. Trump's budge is set to slash at least $800 billion from Medicaid and reduce social spending in a number of other areas. How could Trump's budget impact your healthcare in the future? We break it down, right here.
- Also included in the budget proposal? Trump plans to sell a big chunk of the strategic oil reserve to help fund a massive infrastructure program. Trump is pushing for a mixture of private and public funding to bolster U.S. growth. Keep an eye on industrial stocks tied to the infrastructure space like Caterpillar Inc. (NYSE: CAT), Deere & Co. (NYSE: DE), and General Electric Co. (NYSE: GE).
- It will be another busy day of economic data. The U.S. Commerce Department will provide an update on April new home sales numbers. Analysts expect a decline of 1.5%, but anything worse could drag down shares of housing construction firms like KB Home (NYSE: KBH). Meanwhile, markets are looking for positive growth in the U.S. industrial sector with the release of the Markit Manufacturing Flash PMI.
- Crude oil prices were sliding after President Trump pitched a plan to sell half of the U.S. Strategic Petroleum Reserve to help finance his new budget plan. The threat of a sell-off offset optimism of proposed global cuts ahead of Thursday's meeting among members of OPEC. Should the OPEC production cut be extended for nine months – as members like Saudi Arabia and non-members like Russia have touted – oil prices could experience a huge uptick. The WTI crude oil price today is up 0.95%, while Brent crude remained even. But this is where oil prices could be headed as soon as OPEC announces it new targets.
- Global markets were still rising despite news of a terrorist attack in Manchester, England, last night. More than 20 people were killed, and dozens more were injured after a nail bomb went off at an Arianna Grande concert. British leader Theresa May condemned the "warped and twisted" attack, while Grande canceled the rest of her world tour.
Four Stocks to Watch Today: AZO, F, NFLX, TOL
- In earnings news, shares of AutoZone Inc. (NYSE: AZO) plunged more than 8.5% after the company reported its fiscal third-quarter results. The company fell short of Wall Street's expectations of earnings per share (EPS) of $12.01 on top of $2.70 billion in revenue. The company reported earnings of just $11.44 per share and reported a 0.8% decline in same-store sales.
- Toll Brothers Inc. (NYSE: TOL) rallied more than 3.2% as the housing market continues to show strength. The new home construction firm easily topped Wall Street earnings expectations. The firm reported an EPS of $0.63, topping consensus expectations by $0.10. The company said it had its best-selling season this spring in a decade, and said that the number of new contracts were up sharply over the last year.
- The auto industry just experienced a major shakeup. Ford Motor Co. (NYSE: F) announced that Jim Hackett – who has been on the company's board since 2013 – will replace Mark Fields as the new Ford CEO. The new CEO must now take on Detroit rivals General Motors Co. (NYSE: GM) and Fiat Chrysler Automobiles NV (Nasdaq: FCAU) and tech competitors in Silicon Valley. At Money Morning, we see bright things ahead for Hackett. Money Morning Executive Editor Bill Patalon has chosen Ford as his No. 1 stock pick for 2017… and Hackett is one of the reasons why. Here's what you need to know.
Ford Is Our No. 1 Stock to Buy
- Yesterday marked the 15-year anniversary of the 2002 initial public offering of Netflix Inc. (Nasdaq: NFLX). Netflix has overhauled its business substantially from its early days, and $1,000 invested in its IPO would be worth $130,000 today. The stock has been one of the top-performing companies of the last year, and investors are wondering what to do next. Find out why Money Morning Chief Investment Strategist Keith Fitz-Gerald has raised concerns about the streaming giant. Here's what to do with NFLX right now.
- Look for additional earnings reports from Intuit Inc. (Nasdaq: INTU), DSW Inc. (NYSE: DSW), Cracker Barrel Old Country Store Inc. (Nasdaq: CBRL), Kirkland's Inc. (Nasdaq: KIRK), The Container Store Group Inc. (NYSE: TCS), Universal Corp. (NYSE: UVV), and Tilly's Inc. (Nasdaq: TLYS).
Tuesday's U.S. Economic Calendar (all times EDT)
- New Home Sales at 10 a.m.
- Richmond Fed Manufacturing Index at 10 a.m.
- Four-Week Bill Auction at 11:30 a.m.
- 52-Week Bill Auction at 11:30 a.m.
- Two-Year Note Auction at 1 p.m.
- Minneapolis Fed Bank President Neel Kashkari speaks at 3:15 p.m.
- Philadelphia Fed Bank President Patrick Harker speaks at 5 p.m.